What is a chargeback? A chargeback, also known as a payment dispute, occurs when a cardholder questions a transaction and asks their card-issuing bank to reverse the transaction. With the holiday season fast approaching, we want to help you protect your business and avoid payment disputes. There are multiple reasons for a cardholder to issue a dispute.
Some of the most common are:
- Charge not authorized
- Merchandise or service not as described
- Defective, cancelled merchandise or service
- Incorrect amount
- Duplicate processing
- Merchandise or service not received
- Paid by other means
How do you protect your business and avoid these chargebacks? Start by using a PCI compliant terminal or point of sale system that accepts both chip cards and contactless payments (Apple Pay, Google Pay, etc…). Train employees and/or customers to insert their chip card or “tap” to make the payment, and swipe only if prompted by the terminal if the chip read fails. Manually imprint all key entered credit cards and do not key enter cards that are un-embossed. If you have to manually enter the credit card, answer ALL prompts including address verification and the CVV code.
If you do receive a chargeback notification from your merchant processor, be sure to respond immediately with all the information that has been requested. It could be that the cardholder simply forgot they made a purchase from you. They may not recognize the name that shows up on their card statement. Whatever the reason, be sure you work closely with your credit card processing company to resolve the issue in a timely manner.
As always, if you have any further questions, please feel free to reach out us at 877-327-8308.
Crystal Laake holds the Certified Payments Professional (CPP) designation and has been an FRF team member for 17 years. Contact Crystal with any payment processing questions at crystal@frf.org.